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Fresh From the Bench: Latest Federal Circuit Court Cases

March 26, 2018

Overview

PATENT CASE OF THE WEEK

In re Power Integrations, Inc., Appeal No. 17-1304 (Fed. Cir. 2018)

In In re: Power Integrations, Inc., the Federal Circuit reversed the Patent Trial and ‎Appeal Board’s (PTAB) rejection of a patent as anticipated. Fairchild Semiconductor sought ‎reexamination of Power Integration’s patent, which relates to “a technique for reducing ‎electromagnetic interference (‘EMI’) noise.” The patent had been the subject of numerous ‎district court, appellate, and PTAB proceedings. This appeal turned on the proper construction ‎of a key claim term, where the district court and the board interpreted the claim language ‎differently. ‎

In a patent challenge, Fairchild argued that the claims were invalid in light of the prior art. Power Integrations responded that its invention requires a direct connection between two ‎”coupled” elements, while the earlier inventions all rely on an indirect connection, via a third ‎element. The PTAB agreed with Fairchild that a direct connection was not required, relying on ‎the Webster’s Dictionary definition of “coupled” to provide the broadest reasonable interpretation of the term. ‎

In a 2015 appeal, the Federal Circuit vacated that ruling and remanded the case, ‎pointing the PTAB to the district court’s finding that a direct connection was required. ‎The PTAB “is not generally bound by a prior judicial construction of a claim term.” However, ‎the appellate court instructed the PTAB to determine whether the district court’s construction was ‎consistent with the broadest reasonable interpretation of the term because Power Integrations’ ‎principal argument to the Board was tied expressly to the district court’s claim construction. ‎

On remand, the PTAB asserted that an analysis of the district court’s claim construction ‎was “unwarranted” because “a district court’s claim construction is ‘typically’ narrower than the ‎broadest reasonable interpretation.” The PTAB ignored the district court’s prior construction and ‎again concluded that the “coupled” elements do not need to be directly connected.‎

Power Integrations appealed again, and the Federal Circuit reversed, holding that allowing “coupled” to include indirect ‎connections would render the claim language meaningless—such an interpretation was ‎unsupported by the specification. Though the PTAB is required to construe claims under the ‎‎“broadest reasonable interpretation,” the broad allowance does not grant “an unfettered license to ‎interpret the words in a claim without regard for the full claim language and the written ‎description.” The court concluded “[t]he board has had two opportunities to come up with a ‎sustainable interpretation that differs from the one that survived litigation and has failed. We ‎conclude there is not one.”

Rather than remand, the Court held that there was no invalidity over the asserted prior art. This is the second case in one week in which the Federal Circuit declined to remand for further consideration by the PTAB, and instead held that the evidence of record would be insufficient to render a different conclusion. See our write-up of the Federal Circuit’s decision in DSS Tech. Mgmt. v. Apple Inc., Appeal No. 2016-2523 (March 23, 2018), below.

In an appeal from a inter partes review, the Federal Circuit addressed whether a sufficient motivation to combine had been identified to support an obviousness finding. Specifically, the Federal Circuit addressed the standard for when obviousness can be found from a single prior art reference, the standard for using “common sense” or “ordinary creativity” as a basis for a motivation to combine, and the extent of analysis that the Board is required to provide in finding a patent invalid. The Court also applied the Chenery doctrine, concerning the extent to which the Court is limited to the PTAB’s analysis in providing its opinion. The Court reversed the PTAB and found the patent at issue not invalid, over a dissent by Judge Newman. Judge Newman opined that the proper action would be a remand to the PTAB.

In an appeal from a remand determination of the PTAB in an inter partes review, the Court addressed whether the PTAB erred in declining to consider certain evidence presented by Dell. The evidence was presented by Dell for the first time in oral argument at the initial hearing. On appeal from the initial hearing, the Court found that it was error for the PTAB to consider evidence first introduced at oral argument. On remand, the PTAB chose not to consider Dell’s new evidence. The Court reviewed the PTAB’s decision in accordance with the Administrative Procedures Act and concluded that the PTAB was not required to consider Dell’s new evidence. The Court also affirmed the PTAB’s finding that the disputed claim was not anticipated.